Mattel Posts Surprise Profit in First Full Quarter Under New CEO

RetailReuters

Toymaker Mattel Inc posted a surprise profit in its first full quarter under new chief executive Christopher Sinclair, helped by a rise in demand for its Fisher-Price toys and lower costs.

The company is in the middle of a turnaround as its Barbie dolls have fallen out of favor with young girls, who are increasingly reaching for electronic toys such as tablets and watches.

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Mattel's gross margin improved to 47.9 percent in the second quarter ended June 30 as the company managed to curtail costs by nearly 10 percent.

Sales of Fisher-Price toys, aimed at infants and preschoolers, rose 9 percent in the quarter. They had fallen 17 percent in the same period a year earlier.

Barbie sales, however, continued to disappoint, falling 11 percent to $130.3 million.

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The company reported a net loss of $11.4 million, or 3 cents per share, in the quarter, compared with a profit of $28.3 million, or 8 cents per share, a year earlier.

Excluding items, Mattel earned 1 cent per share, beating the average analyst estimate of a loss of 4 cents.

Net sales fell 7 percent to $988.2 million, below the analysts' estimate of $995.4 million.

Mattel's shares closed at $25.15 on Thursday, having fallen 18.7 percent this year.

(Reporting by Nayan Das in Bengaluru; Editing by Simon Jennings)